United Shore will pay $48 million to settle a HUD-led investigation on its alleged failure to comply with the department’s loan requirements, according to a news release from the Office of the Inspector General.
“On December 28, 2016, United Shore entered into a settlement agreement with the Federal Government to pay $48 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation of certain civil claims the government stated it had against United Shore,” the OIG said in a statement. “As part of the settlement, United Shore agreed that it engaged in certain conduct in connection with its origination, underwriting, quality control, and endorsement of single-family residential mortgage loans insured by FHA.”
According to the Justice Department, between 2006 and 2011 United Shore failed to comply with some FHA underwriting and quality-control requirements. As part of its settlement with the government, the company admitted that it had “improperly pressured” underwriters to approve FHA mortgages, and that its compensation plan tied underwriter compensation to the percentage of loans approved by the underwriter and closed by the company. The DOJ said that United Shore also falsely certified that direct-endorsement underwriters personally reviewed appraisal reports before the company approved and endorsed FHA-insured mortgages.
United Shore already paid $10 million in December, followed by $13 million with interest on March 28. It will pay off the settlement through annual payments of $5 million plus interest for the next five years, ending on March 27, 2022.
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